HUGHES SPACE AND COMMUNICATIONS COMPANY Communications and Customer Relations P.O. Box 92919 (S10/S323) Los Angeles, CA 90009 (310) 364-6363 www.hughespace.com

AIR FORCE AWARDS HUGHES $65 MILLION FOR PROCESSOR WORK

LOS ANGELES, June 9, 1997 -- Hughes Space and Communications Company (HSC) has received a three-year, $65 million contract to develop and demonstrate a prototype for a digital processor to be used in the next generation of military communications satellites.

The U.S. Air Force Space and Missile Center at Los Angeles Air Force Base awarded a contract May 21 to a team led by Hughes and including Raytheon Electronic Systems and Applied Signal Technology, Inc. The payload processor is for the Advanced EHF (extremely high-frequency) Satellite program, scheduled to enter production in 2001.

Under the contract, HSC will develop an engineering model of an advanced digital signal processor with anti-jamming protection. This processor is the core of the satellite payload, receiving signals, routing them and preparing them for transmission back to Earth. Engineering models are used to reduce risk and demonstrate a design's capability before production begins.

In addition to the processor, HSC will provide systems engineering support to the government to ensure that system requirements are compatible with available technology and with terrestrial networks.

HSC President Donald L. Cromer said this new government contract addresses a critical technology. "Digital processing payloads represent the future of satellite communications," he said. He pointed out that HSC has been on the forefront of developing such processors for commercial as well as military applications over the last several years. For example, HSC is building the Navy's 10 UHF Follow-On spacecraft, seven of which have EHF payloads with digital processing. HSC also delivered an EHF processing payload for polar coverage. In addition, HSC is building 12 satellites for ICO Global Communications for a mobile system that relies on satellite-based digital signal processors.

Walter J. Atkins, general manager of HSC military satellite communications systems, said: "This contract gives us the opportunity to apply our extensive experience and expertise in advanced digital processing payloads and systems, and to take advantage of efficiencies gained with commercial practices. This lowers the development risk, and ultimately the cost, of the follow-on to the Milstar program."

The MILSATCOM Joint Program Office, Advanced Programs Directorate, is overseeing the processor project.

HSC, a unit of Hughes Electronics Corporation, is the world's leading manufacturer of commercial communications satellites, having built 40 percent of those in operation today. HSC also is a major supplier of spacecraft and equipment to the U.S. government, including the Medium Data Rate payload for the Milstar satellites. It also has built weather satellites for the United States and Japan. The earnings of Hughes Electronics are used to calculate the earnings per share attributable to GMH (NYSE symbol) common stock.

Applied Signal Technology designs, develops, manufactures and markets advanced digital signal processing equipment to process a wide range of telecommunications signals for commercial and government applications.